Shares of GameStop Corp (NYSE:GME) sank 19.5% on Thursday morning after the video game retailer unveiled plans to raise up to $1.75 billion through a private offering of zero-coupon convertible senior notes due 2032.
The offering includes an option for initial purchasers to buy an additional $250 million in notes within 13 days of issuance, the company said.
The unsecured notes will not carry interest or accrete in value, and will mature in June 2032, unless earlier converted, redeemed or repurchased.
Upon conversion, GameStop said it will settle in cash, shares of its Class A common stock, or a combination of both, at its discretion. Terms including the conversion rate and redemption rights will be finalized at the time of pricing.
GameStop said it intends to use the proceeds for general corporate purposes, including “potential acquisitions.”
The move follows a March announcement in which GameStop signaled its intent to pivot toward holding Bitcoin as part of its corporate treasury strategy. The company revealed last month that it had acquired more than 4,700 bitcoin. As of late Wednesday, the cryptocurrency was trading around $109,000.
The offering comes just days after GameStop reported its latest quarterly results. Investors appeared to react negatively to the announcement, sending shares sharply lower in early trading.
GameStop has been attempting to evolve from a brick-and-mortar game retailer into a more diversified tech and investment platform. Thursday’s note offering underscores its efforts to tap capital markets to fund that transformation.